Survey by reichelt elektronik shows the consequences of global supply-chain shortages on European businesses and what measures they are taking during this crisis.
Sande, 16.06.2021 – Since 2020 began, supply chains worldwide have become increasingly unstable and vulnerable. The supply of essential components including computer chips and essential raw materials has faltered, and businesses across Europe are suffering the consequences. Audi recently had to put 10,000 workers on short-time work again in Germany, not because of COVID-19, but because important computer chips are missing from production.
A survey commissioned by reichelt elektronik shows the effects supply shortages are having on European companies and how they are working to overcome these new challenges.
An average of 36 days of production downtime in European companies
94% of respondents reported production stoppages due to supply shortages since the beginning of 2020. The reasons for these stoppages are late deliveries or missing components. 45% even had to accept a production stoppage of more than one month.
Every day that machines are at a standstill causes immense costs to these companies. Small businesses with up to 50 employees had to contend with a loss of just under €100,000 on average, while medium-sized businesses (50-250 employees) already had to compensate for a loss of turnover of well over half a million euros. Across all business sizes, the survey revealed that the European businesses surveyed have recorded losses since January 2020 averaging €924,000 in Germany, €939,000 in Austria, €1,000,000 in Switzerland, €757,000 in the Netherlands, €111,000 in Italy, and €938,000 in France.
There were also further negative consequences for businesses due to a disrupted supply chain. 35% confirmed that prices for certain components increased significantly. Just over a third (35%) said that although production did not have to be shut down, there were significant delays. Likewise, 34% of the companies surveyed had to put their employees on temporary part-time work, while one fifth (19%) even felt forced to lay off workers.
Hope on the horizon?
63% of businesses expect that the situation will improve in the next 12 months. However that still leaves 26% who do not expect the situation to change for them this coming year. The factors that could continue to put a strain on the supply of components and materials are primarily the shortage of sought-after raw materials (40%), an increasing demand for certain components (36%) and the possibility of more pandemics occurring in the future (35%).
As a result, many companies have been looking to mitigate the impact of the crisis. Distributors are a particularly reliable source of supply, and this has been recognised as just under half (49%) of the decision-makers surveyed stated that their company now uses distributors as suppliers for components and goods to ensure a smooth production flow. Other measures to reduce the crisis include holding more stock of the relevant parts (47%) and sourcing directly from the manufacturer (35%). More than one-fifth (21%) have even switched to manufacturing critical components themselves.
Politicians need to step in to provide sustainable solutions
To be prepared for future supply shortages, companies are aiming to build up larger inventories (43%) and source more components locally (34%). Another 30% even want to adjust their product portfolio.
However, companies can only do so much alone. It is also the responsibility of national European governments to strengthen their economies and make businesses resistant to future crises. 35% of the companies surveyed would like to see their politicians fund and support research into future technologies and the production of essential components at home. On trade issues, over a third (36%) see a need for more cohesion in the EU in their approach towards other trading partners.
Image: Adobe Stock, infographic: reichelt elektronik
Further information:
Survey: The figures were collected by the international survey institute OnePoll for reichelt elektronik and include 1,900 participants from Europe (500 from Germany, 150 from Austria, 150 from Switzerland, 250 from the Netherlands, 250 from Italy and 250 from France).
